X. Use Restrictions and Rules

10.1. Plan of Development: Applicability; Effect

Declarant has established a general plan of development for the Community in order to enhance all Owners’ collective interests, subject to the Board’s and the Members’ ability to respond to changes in circumstances, conditions, and desires within the Community. The initial Use Restrictions and Rules attached as Exhibit “C,” establish affirmative and negative covenants, easements, and restrictions on the property subject to this Declaration.

All provisions of this Declaration and any rules and regulations promulgated by the Association shall apply to all Owners, occupants, tenants, guests, and invitees of any Unit. Any

lease on any Unit shall provide that the lessee and all occupants of the leased Unit shall be bound by the terms of the Governing Documents.

10.2. Authority to Promulgate Use Restrictions and Rules

The initial Use Restrictions and Rules applicable to all of the Community, attached as Exhibit “C” to this Declaration, may be modified in whole or in part, repealed, or expanded as follows:

1. Subject to the Board’s duty to exercise business judgment and reasonableness on behalf of the Association and its Members, the Board may adopt rules which modify, cancel, limit, create exceptions to, or expand the initial Use Restrictions and Rules. The Board shall send notice by mail to all Owners concerning any such proposed action at least five (5) business days prior to the Board meeting at which such action is to be considered. Members shall have a reasonable opportunity to be heard at a Board meeting prior to such action being taken.

   Such action shall become effective unless disapproved at a meeting by Members representing at least fifty-one percent (51%) of the total Association votes and by Declarant, so long as Declarant owns any property described on Exhibits “A” or “B.” The Board shall have no obligation to call a meeting of the Members to consider disapproval except upon petition of the Members as required for special meetings in the By-Laws.

2. Alternatively, the Members, at a meeting duly called for such purpose as provided in the By-Laws, may adopt rules which modify, cancel, limit, create exceptions to, or expand the use restrictions and rules previously adopted by a vote of Members representing at least fifty-one percent (51%) of the total Class “A” votes in the Association and the approval of Declarant, so long as Declarant owns any property described on Exhibits “A” or “B.”

3. At least thirty (30) days prior to the effective date of any action taken under subsections (a) or (b) of this Section, the Board shall send a copy of the newly-adopted rule to each Owner. The Association shall provide, without cost, a copy of the new Use Restrictions and Rules then in effect to any requesting Member or Mortgagee.

4. The foregoing procedures shall not apply to the enactment and enforcement of administrative rules and regulations governing the use of the Common Area unless the Board chooses in its discretion to submit to such procedures. Examples of such administrative rules and regulations shall include, but not be limited to, hours of operation, rules and regulations regarding the use of the Community recreational facilities or landscaping on the Common Area. The Board shall exercise business judgment in the enactment, amendment, and enforcement of such administrative rules and regulations.

5. The foregoing procedures shall not restrict amendments to this Declaration or the Design Guidelines enacted under Section 9.3.

10.3. Owners’ Acknowledgment

All Owners and occupants of Units are given notice that use of their Unit(s) is limited by the Use Restrictions and Rules as they may be amended, expanded, and otherwise modified hereunder. Each Owner, by acceptance of a deed or

entering into and Recording a contract of sale, acknowledges and agrees that the use and enjoyment and marketability of his or her Unit can be affected, that the Use Restrictions and Rules may change from time to time, and that such changes may not be reflected in a Recorded instrument.

10.4. Rights of Owners

Except as may be specifically set forth in this Declaration (either initially or by amendment), neither the Board nor the Members may adopt any rule in violation of the following provisions:

1. Similar Treatment. Similarly situated Owners and occupants shall be treated similarly.

2. Signs. No sign of any kind shall be erected by an Owner or occupant within the Community without the prior written consent of the Declarant or Architectural Review Committee, as applicable. Notwithstanding the foregoing, the Board and the Declarant shall have the right to erect reasonable and appropriate signs. The provisions of this Section shall not apply to any Person holding a Mortgage who becomes the Owner of any Unit as purchaser at a judicial or foreclosure sale conducted with respect to a first Mortgage or as transferee pursuant to any proceeding in lieu thereof. The Board may impose a fine of One-Hundred and Fifty and No/100 Dollars ($150.00) per day for display of any sign in violation of this provision which is not removed within twenty-four hours after written demand is delivered to the Owner at that Unit.

3. Displays. The Board may adopt rules governing or prohibiting display of religious and holiday signs, symbols, and decorations outside of structures located on Units, and adopt time, place, and manner restrictions for the purpose of minimizing damage and disturbance to other Owners and occupants.

4. Household Composition. No rule shall interfere with the freedom of occupants of Units to determine the composition of their households, except that the Association shall have the power to require that all occupants be members of a single housekeeping unit and to limit the total number of occupants permitted in each Unit on the basis of the size and facilities of the Unit and its fair use of the Common Area.

5. Activities Within Dwellings. No rule shall interfere with the activities carried on within the confines of dwellings, except that the Association may prohibit activities not normally associated with property restricted to residential use, and it may restrict or prohibit any activities that create monetary costs for the Association or other Owners, that create a danger to the health or safety of others, that generate excessive noise or traffic, that create unsightly or unkempt conditions visible outside the dwelling, or that create an unreasonable source of annoyance.

6. Alienation. No rule shall prohibit the leasing or transfer of any Unit, or require consent of the Association or Board for leasing or transfer of any Unit; provided, the Association or the Board may require a minimum lease term of up to 12 months. The Association may require that Owners use lease forms approved by the Association, it may impose a reasonable fee on the lease or transfer of any Unit based on the costs to the Association of administering that lease or transfer and it may require that all lessees receive a copy of the Governing Documents.

7. Reasonable Rights to Develop. No rule or action by the Association or Board shall unreasonably impede Declarant’s right to develop the Community.

8. Abridging Existing Rights. If any rule would otherwise require Owners or occupants of Units to dispose of personal property which they maintained in or on the Unit prior to the effective date of such rule, or to vacate a Unit in which they resided prior to the effective date of such rule, and such property was maintained or such occupancy was in compliance with this Declaration and all rules previously in force, such rule shall not apply to any such Owners without their written consent unless the rule was in effect at the time such Owners or occupants acquired their interest in the Unit.

9. Activities Incidental to Construction. No rule or action by the Association shall impede Declarant or builders authorized by Declarant from maintaining upon the Common Area and Units which they own any facilities necessary or incidental to the construction or sale of Units. By way of example and not limitation, no rule shall prohibit Declarant or builders authorized by Declarant from installing signs, maintaining temporary structures for use during construction of a Unit, or from using any dwelling on a Unit as a sales office. The limitations contained in this Section 10.4 shall apply only to the Use Restrictions and Rules adopted or amended in accordance with Section 10.2; they shall not apply to amendments to this Declaration adopted in accordance with Section 15.2.